Fixed Income

This week, we update our Central Bank Monitors (CBMs), that help us calibrate how monetary policy should be adjusted in developed-market economies. Our conclusion is that while overall, easier monetary settings are required, there a few trade ideas that arise from the divergences in signals amongst G10 countries.

The force of the post-election momentum leads us to believe we could be stopped out of our defensive positioning before the week is out, but we still believe in our recession call. If we are eventually stopped out, we will seek a more opportune entry point to bet against risk assets once the election fever runs its course.

This Strategy Insight presents our view on today’s rate cut by the Bank of England as well as the budget announced by the UK government last week.

Our thoughts on the bond market’s reaction to the election and this afternoon’s FOMC meeting.

The Election Day is finally upon us. No, there is no final “silver bullet” forecast contained in this email. Just our long-term forecast of how the election will, no matter who wins, impact the markets.